June 1, 2016
The Dairy Situation and Outlook report released on Wednesday by Dairy Australia fails to disclose the truth about the impacts of the supermarket milk price war, according to the Queensland Dairyfarmers’ Organisation.
Dairy Australia is the peak body for the dairy industry and collects a levy from dairy farmers to promote dairy R&D.
Its latest report indicated the value of fresh milk sales has risen $325 million since the milk price war started on Australia Day 2011.
However, QDO president Brian Tessmann said the report had not reported the “full reality” of the impacts of the milk price war on the dairy market in Queensland.
“The report presents the total value of milk sales increasing since the milk price war started in 2011, but fails to accurately disclose the more than $200 million per annum in losses sustained by branded sales to supermarket private label fresh white milk leading to less money in dairy farmers pockets,” Mr Tessmann said.
“The figures presented by the Dairy Australia report cover all milk sales, including flavoured milk, which disguises the impact in the fresh white milk category where the milk price war is occurring.”
“The analysis also didn’t take account of discounting forced on the route trade.
“If flavoured milk was excluded and a representative trade route milk price was used, there would be a substantial fall in the value of fresh white milk sales in the last five years, particularly in the modified fresh milk category where supermarkets made the biggest cuts.
“This fall in the per unit value of fresh white milk sales since 2010 is clear.
“It’s time for Dairy Australia disclose the full impact of the milk price war.
“It’s clear that $1 per litre milk is unsustainable.
“The last time milk was priced at $1 per litre was in 1992 and since then Queensland farm gate prices have only gone up 20 per cent.”
The Milk Price War was started by Coles on Australia Day 2011 when they dropped their home brand milk by up to 33 per cent to $1 per litre, resulting in other major retailers following suit.
“Since 2011 more than 170 dairy farmers have left the Queensland industry when we have been short of fresh milk and should not have lost any,” Mr Tessmann said.
“This equates to a loss of some 170 million litres of milk production per annum and some $550 million in milk production investment and more than 580 on-farm jobs.
“Queensland will import some 180 million litres this year from interstate to meet the needs of Queensland consumers. This should not be happening.
“The best way to support local Queensland dairy farmers is to buy branded milk and dairy products as it adds value to the product and ensures our farmers are paid the fair price at the farm gate they deserve.”
- External link: Dairy Situation And Outlook Report
